We talk with the guy who is still the publisher of slam, the inyourface basketball magazine. All that and more, but first, the headlines. Thank you so much. Busy in the afterhours today. Tesla out with its Earnings Report. The automaker earned . 11 a share, beating analyst estimates. Tesla also reported secondquarter sales that matched estimates and beat its own forecast. Meantime, linkedin giving a revenue forecast that topped estimates. Revenue projected to be between 543 million and 547 million. Shares rising after the trade. And go pro reported a wider quarterly loss than analysts expected. Those are some of the top headlines at this hour. Back to you. Thank you. Thanks a lot. Here to talk about todays selloff, equity strategist tony dwyer. What happened . I dont know if i know anything. Basically, theres a lot of excuses for the selloff. It has been a very tired market to begin with. A very frustrating few months because the internals of the market have been correcting. Portfolio managers or individual investors can look at stocks and ask how the market could be at a new high in their portfolios are not. What is happened is in a correction, thats how it works. In a bull market like we are in, you go up a significant amount, and the market starts to deteriorate, and it ends up in equity indices, and that is kind of what happened today. You could blame argentina, russia, the guy at the strip, the gdp number the gaza strip, the gdp number, but ultimately, the market was tired, and it needed a correction. My friends make fun of tv reporters saying that they look at stock chart and they look at the latest headline and try to connect the dots as if they are related. A lot of people argue economic numbers are better from some companies but also the notion that there is a lack of participation in this market by a lot of big mutual funds and individual investors. Thais really true. You have to have money flowing into stocks. You market moving higher let me rephrase that. The major equity indices and megacap stocks moving higher over recent months is more of a lack of any sellers than any real significant pickup in buyers. You can have a stock go up by having a single buyer if there are no sellers, and that is what happened. Fundamentally, the backdrop remains terrific. Earnings have been coming in well ahead of expectations. Even better than the usual shenanigans that Corporate America plays in underestimating or under projecting earnings. It has been a very good quarter. The economy is very clearly picking up steam, and that has brought in some fear of the fed, which ultimately will be a healthy thing. Looking at the biggest companies, companies over 20 billion in markle cap, i found that only a quarter of them had lower sales in the last quarter than they did the year before. You can make the case that the Global Economy a lot of people have been trying to make the case that a Global Economy is going to pick up steam, and i just am not seeing it in any of the numbers. While you have the u. S. Doing a little bit better, its not exactly like we have a robust economic backdrop, and the rest of the globe is slowing down. The story is not in my view, buying equities is not just about strong earnings. What it is about is a lack of investment alternatives for the big institutions and Pension Funds that have to meet a certain amount. For the people listening, if you are, say, the state of california, and you have benefits you have to pay out, and you have to make seven point 5 a year to be able to pay out those benefits, if you are in any component to fixed income, it almost makes it virtually impossible. Your investment alternatives are other than private equity are very few and far between, and it is that equity arena that is most attractive. Well put, tony dwyer. We appreciate your time. Lets talk about one of those companies trying to make things happen. Gopro. The stock went bonkers after the ipo. Jon erlichman, my colleague, joins me now from los angeles. What did the quarter look like . Its funny, you talk about that technical term of bonkers. Thank you. You can tell i was a former money manager. Im than trained professional. You are talking about which companies are seeing revenue growth. This is a company that is seeing revenue growth. It has had the hot hand. I have the hot product. Everyone from surfers to Different Industries are now using these in a big way, and revenue was up about 38 . It generated basically 245 million up from the neighborhood of 177 million last year. When you see the stock immediately decline, people try to make sense of it. On one basis, they were profitable in the quarter. On another, they were not. What you are seeing is a company that is rapidly expanding. If costs are growing along with revenue, which certainly does cut into profitability, and because of that bonkers first day of trading, at the end of this trading day, we are getting close to 50, getting at a 5. 8 million market valuation. Maybe that does result in some pause by investors. The company sold this not just as a camera slinger but also as a media company. When you look through the sec filings, when they went public, theres very little in terms of numbers about their media business. Did they give any more details about how that is going . In short, no. This always Conference Calls where you can do that. I think you are right. As you went through the filings of this company, the one thing you could sink your teeth into was the shipments of the devices. Last year, they moved about 3. 8 million of these things, basically tripled from 2011. Theres no doubt they are moving the hardware. As far as the image of this being a media company, i think that is a long road. There are the highprofile examples they have shared, getting more deals cut, the watch gopro video when you are an xbox one user or on an American Airlines flight. Still hard to see the numbers. Thank you so much. Senior west coast correspondent jon erlichman. Joining me now, to help us break down the Earnings Report from tesla, the ceo of Weiss Harrington associates, nathan weiss, and also efraim levi, from the s p. They beat estimates. I wasnt going to rhyme rub it in. But go ahead. I was higher than other analyst. I was closer. The deliveries were slightly above expectations, generally in line. Good news they announced it. I would still like more details on that. China is at the early stages of growth. I think thats going to be an important area of growth. Basically steady as she goes that they are executing on the plan. What did you think . Fairly solid quarter. They beat expectations to a wild agree wild degree. Tesla is maintaining a 35,000 unit fullyear delivery, so pushing 14,000 potential deliveries to make the numbers. Any news about model x . Model whatever . They have not said a whole lot about that yet, but they seem to be on plan. They are making the investments. Until we see actual deliveries, its not there. Again, as i indicated before, they are generally executing, so i give them the benefit of the doubt in that area. Let me ask you about this there was a sentence in the press release that jumped out at me because theres all this excitement about the gigafactory which is so much better than a factory, like a hyperloop it has more loop. April around in reno for a potential site. What does that mean . If you look in the forums, people have gone and taken pictures. They have started flattening things. They have a permit to do so. They broke ground. But it is a potential site. So even though it has the construction equipment, this might not be the site . Reportedly, they are still pushing to get california. They just have not gotten the environmental permits. At least they got bulldozers pushing around some dirt. How important is a gigafactory or even just a factory to teslas and medium teslas immediate success . It is important to get more fuel cells from suppliers so they do not have backlogs or interruptions that they cannot produce enough vehicles to meet their backlogs. Let me challenge you with that they made more cars this quarter than they needed to make. Production was nearly 1000 more than they made this quarter, and there is no backlog anymore. According to the press release, it seems to be indicating the backlog is growing. They also have a slowing down of the next quarter of how many they are going to produce, they have to produce ahead, but they also have to ship it. Theres the difference between shipping and delivering, and theres only so many they can produce at one time. If they want to expand in china, that means they may have to cut back in markets such as the u. S. Do you see backlog . If you parse the statement, sequential orders were up, and we track the time from order confirmation, which is usually 24 hours after placing an order to the start of production. That went from 71 days to 30 days on march 30. They should always have a backlog because they cannot produce a car the day you order it. Interesting stuff. Love my tesla earnings because they are always weird. Next, we go to argentina where we hear how the company is reacting to the countrys default. And the pioneer of a social Robotics Company joins me. This is taking stock. Welcome back to taking welcome back to taking stock. The latest on the debt crisis in argentina the president is about to address the nation for the First Time Since the country entered into technical default. What is the governments attitude toward this debt problem and solving it . Thats an interesting question. They have been pretty tough on these u. S. Hedge funds. There have been some promising signs in terms of dealing with debt problems, but in this particular issue, they have been very critical. There has been a bit of a change in the attitude here. The last hour or so, the chap that was leading the charge in new york yesterday, he was a bit more conciliatory and said they would continue talking with holdout funds, the people who have not been satisfied with payments so far, but he is still using harsher rhetoric. I wonder how this resonates on the streets of when a sarris of windows of buenos aires. Thats a good question. A lot of ordinary people say they like the tough rhetoric. But people i have been talking to, the kind of urban elite have said it is all just empty rhetoric. It is political theater, and there is a lot of empty rhetoric that they tend to see through. I would like to hang out with these political elites. For the regular joe in argentina, is this affecting the economy and the daytoday lives of the people in argentina . I think in the near term, its not going to have a dramatic affect on the countrys economy. For those businesses that may rely on dollar values in terms of the pace our exchange rate, that may be problematic if the situation continues. The big problem is inflation. Thank you very much. We appreciate it. Coming up next, we are going to look at slam magazine the publisher joins us. And target names its new ceo. We talk about that next. This is taking stock. Target has hired pepsico executive Brian Cornell as the new ceo. Carol massar and les berglass join us now. What is it like to convince them to bring in an outsider . I dont think they have a lot of choices. And i think we need some clarity on outsider. The Retail Industry is incestuous and loves its own, and thats one of the problems. What we are looking for is vision, and not going to come to a company or an industry that does not welcome outsiders. Here is a man at pepsi, who is a big vendor to target, im sure. He has extraordinary experience in food and supermarkets where they need help. When a company like target goes into this food space, you are dealing with margins that are incredibly different, and you need an expertise different being enormously worse, and this is the supermarket business. Its really about generating cash and using that cash flow to run the rest of your business. Right. And he understands that. He also brings an expertise or a balance because he is a retailer. There are challenges what you mean . They want a lot, and they want a lot for the price. When you are a vendor, a wholesaler selling them something, you have to balance with adjusting your cost because he has that experience. He will be wonderful with the vendor community, so when the company is leaning on the vendors, he can say, we need to back off a little bit because the more we take, the less we are going to get. I also wonder if he gets more street credit because he is in outsider walking in. Maybe he will be able to shake the trees a little bit, create more of it risky culture. Target has been very conservative. While a lot of retailers have expanded internationally, target has been very slow to do that. Test, test, test, taking their time while competitors may have gone ahead of them, so maybe they will bring more risk and more of a fast approach. Other outsiders did not seem to like taking all those risks and making all those changes. If you have a marriage that fails does not mean youre not going to get married again. Maybe it means you shouldnt. The issue here, and i think thats a good bridge to a point when need to bring up ron johnson was trying to innovate, and he went too far. What has to happen we only target as an innovator. They want fun shopping at a price. What brian has to do in our opinion, and the big question is can he return this business to the innovative retailer it was . A lot of people criticize him because he has worked very big businesses that are not known for innovation. A leader today has to surround themselves with talent. The retail world has become so complex that no individual leader has every skill you want. What he has to do is he has to innovate, and he has the skills to fix the broken pieces. He has international pieces so he can take care of canada. Thank you very much. We appreciate it. Thanks for your time. 26 minutes past the hour means it is time for on the markets. The s p 500, dow 2 . Big selloff today. Dow jones industrials down a little bit less. The nasdaq down 2. 1 . More taking stock right up to this. This is taking stock. Im cory johnson, in for pimm fox. Iliad offered 15 billion in cash to buy 55 56 stake in tmobile u. S. This is the same day the tmobile reporting results. The subscriber topped estimates. The ceo talked with my colleague, emily chang, about the future of the company. You know, i have said many times, there are multiple players, multiple options for the company. Im not going to comment on any specific one. You can figure out, how do you get scales, how do you get spectrum, how do you get capital . One way is to move aggressively. And then various accelerants access. Exist. You should be clear. There is great interest in tmobile. We will consider any option that exists for the shareholders. That was like the foreshadowing tease of the century. Various options for the company, accelerators for more on what those accelerators might be, Michael Maccormack is here. Michael, do they need accelerants . Do they need capital to build up this network . A lot of people question why not organically. They have been doing a great job on taking share. Sprint has been a donor for the entire industry. From a cash perspective, they are sort of hampered right now given some of the plans out there. The spectrum auction is coming up. They are looking for different ways to bulk up. Specifically, were you shocked by this iliad operative . Does it make any sense to you that guffey might swallow this whale . Definitely came out of left field. There are multiple discussions in the marketplace, sprint being top of the list. There are a number of things, potentially carlos slim coming in. Dish, with Charlie Rubin coming in with a spectrum position to help them become a bigger player in the marketplace. This was clearly out of left field. There is a notion here that Deutsche Telekom might want to unload some of their shares, because any sort of sprint deal would require a lengthy regulatory process and maybe iliad would help them lighten their load a little bit right here. Clearly tmobile in the past has been a troubled carrier, and they have really turned things around. It might be that there is more of a Comfort Level from the twinge telecom side saying, this is an interesting business, and we are willing to take more equity on a combined basis. A lot of that pressure has been alleviated recently. When i was a short seller, one of my colleagues refuse to ever meet the ceo of a coveney lest he be charmed. I will admit to being charmed by the tmobile ceo, john leger. I wonder you talk to wall Street Investors all the time. Guy traipsing around in a tshirt how is that playing out in wall street . It is certainly a change from Traditional Telecom executives we have known. Tweeting and wearing magenta tshirts and things like this. It is definitely a different look. It is resonating with customers. He has done a lot of things to shake up the industry. You see at t and verizon and probably soon spreads reacting aggressively to the price moves he has made. It has frankly lowered the price of the industry. It is shaking things up quite a bit. What is the single biggest change . Unfortunately, he has proved there is price elasticity in u. S. Wireless. Could hurt the profits. Sure, and it is a scale business. You need spectrum, network utilization, network assets. These require cash flow. To the extent that you continue to have somebody chipping away the price points, the return on capital as an industry is worse than it was just a year ago. These guys have. Got a lot of bond payments to make. If you are looking at a subscale businesslike tmobile, sprint, to the extent they get that monthly revenue, it will drop straight to cash flow. For them it is a game they can play for a certain period of time. Once they scale up and you start bumping up against spectrum needs, more Network Spending needs, that is where these low price points could become more of a problem for them. I spent some time with legere and the rest of his team. Macklemore, the rapper, was there. These guys got together long before they came into the whole Global Crossing team got together, looked at tmobile, thought what if we did this . What kind of sense could we create . How far along do we think they are in their secret, longterm plan for tmobile . They have introduced the idea a 7. 0 is coming very shortly. There have been a lot of changes. When we walked in there, it was a sleepy brand. That has all changed. To the extent that they are offering unlimited services, international service